7 Reasons You Should Review Your Life Insurance Policy

For some reason a lot of folks think once they buy a life insurance policy they can “set it and forget it” and they don’t give a second thought to asking good questions about their life insurance and addressing their insurance needs.

I am a big believer in reviewing your financial plans at least annually, and a thorough look at your annual plan should give you a reason to review your life insurance needs.

Figuring that you never have to review your insurance needs is one of the most common misconceptions about life insurance! But, if you don’t review your plan annually – or, for that matter, don’t have a financial plan – here are some guidelines to know when you should review your life insurance:

1. Your Income Changed

Maybe you just graduated from college and landed a great job with some good benefits. How much life insurance do you really need?

Perhaps you got promoted in your company and now you’re looking at a nice raise – how does that impact your life insurance needs?

Or maybe you lost your job and it’s time to re-evaluate your life insurance situation.

Whether you got a new job or you lost one, it’s a perfect opportunity to do a review of your life insurance.

2. Your Health Changed

This is an important one! Let’s say you’ve been working out and eating healthy and as a result your blood pressure went down – congratulations, this may also affect not only your health insurance rates but also your life insurance rates!

Companies generally will reward you if you are in great health by offering you discounted premiums. You may want to call your insurance company and ask what kind of rates you’d get for a preferred health discount.

The discounts in many cases can be very substantial!

Now, let’s say the opposite happens – you are diagnosed with diabetes or some other type of disease.

You may not be able to increase your individual policies, but you may want to increase your group policies through work because typically you don’t have to prove evidence of insurability.

3. You Lost Weight

This is related to health, but different enough to make a distinction. Let’s say you’ve been playin’ Wii Fit for the last five months and you joined the Biggest Loser fan club – as a result you’ve lost some weight!

4. Your Family Status Changed

If you are expecting a child, you will soon begin to feel enormous pressure to provide for your little tyke. If you already have kids, you know what I’m talking about.

It’s extremely important to sit down and ask tough questions like, “What happens if I die and my wife is left with the kids?” You may also ask, “Who will provide for my kids if I pass away?”

Maybe your kids are older and you’re wondering more about college savings and you’re not that worried about life insurance anymore. Or, you may need to increase your life insurance if you want to pay for their college should something happen to you.

Even though those conversations aren’t fun, they are crucial to providing for your children and important when reviewing your life insurance policy.

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ArticleBy Jason

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Lencib, it’s probably time to start checking into the proper amount of insurance for you guys.

Lorne – great point a/b the tobacco rating – many times it’s over double the amount it would be for non-tobacco, so if you’re a smoker and have quit you may want to check into lowering your premiums!!

Cedric D'Hue

April 24, 2010

Thanks Jason for the great article. This article was personally relevant to me because I recently lost about fifty pounds. I informed my health insurance provider and they lowered by monthly premium by over $100!

Completely agree. This is a campaign my company has really pushed this year–get the word out to review and compare!

Hi, I am Bob! We help generous people have more than enough money - and it all just starts with a seed. Find out more here.

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